Unlike most terminal emulators, iTerm2 comes with a pretty complete set of features. It has built-in search, autocompletion, tabbed navigation, Growl support and even a built-in clipboard manager for various API keys and such.

If an application has terminal integration, there is high probability it allows iTerm2 to be selected.

Issues resolved fast by quality contributors.

You can Command+Click on a file path to open said file in a text editor.

iTerm has autocomplete features built in. It remembers your past commands and when you are writing something on the terminal, simply pressing Command-; it will show you a drop down menu of suggestions from which to choose.

Other than being able to customize the various shortcuts, iTerm2 also lets you customize the colorscheme, font, transparency, etc.

It's possible to choose a font and adjust vertical and horizontal spacing.

iTerm2 can store up to 4M of history of commands you already used. This, coupled with the built-in search features makes it possible to type a command only once and then search for it through the history for subsequent uses.

Can be configured to work as a drop down terminal like Quake.

iTerm2 is completely free and open source. It's released under the GPLv2 license.

Very handy to use multi-tab.

Wanna SSH your server from multiple tabs, here you go.

Using the Preferences Menu you can set up hotkeys to map virtually any action you can think of to a single key or a combination of them. This is extremely helpful as it allows you to use shortcuts to edit commands you are typing in the terminal and while most terminal emulators have shortcuts for this sort of thing, few of them let you define your own.

Has support for mouse actions like clicking, dragging, selecting, etc.

Easy to split panes to either horizontal or vertical sections. Makes it easy to observe multiple console windows.

The great mouse and clipboard support that are built-in go really well with tmux.